Indonesia secures investor for Nipa Island oil storage project

By Calvin Purba

The Indonesian government has secured an investor for a planned oil storage facility on Nipa Island in the Riau Islands, according to Bahlil Lahadalia, minister of energy and mineral resources.

Bahlil said the investment will combine domestic and foreign funding, noting that the foreign investor involved is not from the United States.

“The investor is already there. The investment can be blended between domestic and foreign sources, but not from the US,” he said on Wednesday.

The project will involve private sector participation and is part of the government’s plan to develop an oil storage facility on Nipa Island to strengthen national energy reserves.

The facility forms part of the government’s Energy Buffer Reserve program, known as CPE, which aims to expand Indonesia’s strategic fuel stockpile capacity.

Read also: Indonesia plans oil storage project, targets construction start this year

Indonesia currently has storage capacity equivalent to about 25 to 26 days of consumption, and the government plans to gradually increase reserves to strengthen supply security.

The policy framework for the program was established under Presidential Regulation No. 96 of 2024, which sets targets for strategic reserves including 9.64 million barrels of gasoline, 525,780 metric tons of liquefied petroleum gas and 10.17 million barrels of crude oil.

Bahlil said the project is currently undergoing a feasibility study, with construction targeted to begin this year.

The government plans to allocate between Rp64 trillion ($3.79 billion) and Rp69 trillion ($4.08 billion) through 2035 to strengthen national energy security and maintain strategic reserves during potential supply disruptions.

Editing by Alexander Ginting